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To Make Wine or Market?

Texas winemakers are better off spending money on marketing than buying quality grapes, Texas Tech study finds.

Written by Cory Chandler

Texas winemakers are better off spending money on marketing than buying quality grapes, Texas Tech study finds.
This may be a hard truth for budding vintners to swallow, but when it comes to the survival of a brand, quality winemaking may be less important than savvy marketing. In fact, winemakers with limited resources may be better off spending their money on marketing than purchasing higher quality grapes, according to a brand mortality study conducted by researchers at the Texas Wine Marketing Research Institute and Rawls College of Business at Texas Tech University. The 15-year study tracked the fates of 25 Texas wineries beginning in 1991, when nearly 1,000 Texas wine enthusiasts rated the quality and name recognition of each brand. When researchers revisited those wineries in 2006, they found an unmistakable trend: the better the recognition rating a wine brand received, the more likely it was to survive. No such link existed between quality evaluations and a brand’s success. Their conclusion: high brand awareness is more likely to lead to brand survival than a high perception of wine quality. “Quality doesn’t necessarily determine survival of a wine,” said Natalia Kolyesnikova, an assistant professor with the institute and one of the study’s authors. “The quality may be excellent, but a wine brand will die without recognition.” The study was named the 2008 outstanding paper in the International Journal of Wine Business Research. View a copy of the report (the study begins on page 13).
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8 Responses to “To Make Wine or Market?”

  1. Enjoying Wine and Food Says:

    This is sort of sad because this negatively affects the wine consumer in the end. Ideally the money used towards purchasing a wine would go purely towards buying higher quality.

  2. Brad Altemeyer Says:

    someone would have failed my marketing classes -both the ones I took at Texas Tech, and the ones I teach at South Texas College.
    1. It is not an either or choice- this is the first failure in logic in the article, and even in the design of the comparison.
    2. if the wine tastes bad- no amount of marketing will help you- ever- although perhaps the brand survival of things like Thunderbird, and MD20/20 and the brand image to match are the real results here.
    To me, it’s a bit like the “if a tree fell in the forest” question. Does Brand Survival matter if the brand is “bad wine” for it’s essential meaning to customers? Or the old question in business- “is profit everything?”
    -of course for the wine industry the recent 8 or 9 years have had over production, drop off in demand, many creative attempts at new brand creation, fun brand creation, and wild brand creation- it is almost like recent history has been focused on mass creativity- and a very experimental attitude for whatever brand manages to actually sell the wine- instead of pouring it out (many millions of gallons of wine over the past 8 years has litterally been poured out).

  3. Joshua Barron Says:

    Does this surprise us, really? VHS or Beta, etc., etc. The Bandwagon effect is powerful, and marketing gurus have been telling us for years that people, product, price, placement, and promotion all have a role in these types of decisions. In many cases these days, it appears that promotion is winning out over product.

  4. Lera Logan Says:

    I hate to see this sort of study, because in a market where Texas wines are still struggling for a good foothold, their reputation will suffer in the long run if they go for the cheaper grapes.

  5. Paul Cotter Says:

    I agree with Brad. I think the logic behind the hypothesis of the study is flawed. I don’t believe it is an either or question but rather a mix of quality and marketing. Each winemaker needs to identify and work towards the niche he/she wants to carve out of the marketplace. If you strive to be a quality wine then obviously you must have quality grapes to get there (sorta like the silk purse and sow ear). The quality grapes and wine makers skill then must result in awards and the marketing effort needs to be tailored to high end users ie. upper class resturants and trendier magazines. If, the niche is lower then lower quality grapes and cheaper production costs are critical as well as marketing towards that clientele such as wine distributers liquor shops oive garden etc. If the niche is box wine then tie a string on the grape, dip it in the everclear, mix in the welch’s grape juice, pull out the grape, and slap a label on it and call it Oklahoma Select Red Wine.

  6. David Protz Says:

    Why did this take 15 years? One could look at established brands where marketing outpaces quality / value. Kendall-Jackson is a much better arketer than winemaker and even Dom Perignon costs more than wines of comparable value. However, one needs to look no further than the Gallo empire (the progenitors of “added value”) to see how much marketing matters.

  7. Larry E. Epp Says:

    This is a pivotal paper for two, harmonizing reasons:
    • First, it tells us again that being known in our market – for our products (wines) and our services (and winery amenities) — is what will mark our success; e.g., what our message is and who hears that message matter.
    • Second, it underscores the import of knowing the market your wine serves. If your winery produces low-margin, high-volume, premium wines we serve one market. If your winery crafts high-margin, low-volume, ultra-premium wines we serve a very different market.

    Seth Godin, author of “Purple Cow” and “Free Prize Inside” puts it this way: The story is the product.

    As a small winery in Texas with a (very) limited marketing budget, you need as much word-of-mouth marketing as you can get; to attain this, you have to make your wine worth talking about amongst those in your market who buy it and you do this by giving them a shareable story about your wine and winery.

  8. Sabrina S Says:

    It makes sense to me that a winery will not survive in the long run without investing into marketing. However, no matter how great the marketing, I do not believe that a winery can survive in the long run if the wine tastest really bad (mainly because people would try once and never buy again while telling all of their friends about it). Is it maybe the case that once a certain level of quality is reached (and only past that treshhold), then the brand recognition makes the difference?

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